Our Mining and Projects Director, Alejandro Montt, talked to Diario Financiero about the challenges and development of the National Lithium Strategy in Chilean mining for 2025.
Industry players analyze the difficult local situation, in a scenario where supply must grow at the pace of global demand. The National Lithium Strategy, which is expected to be implemented in September, will play a key role in this.
Given the ever-increasing demand for lithium worldwide, Chile is in a difficult race for leadership, and the development of new projects and incentives that help the country not to lose competitiveness is urgently needed.
According to Cochilco’s latest report on the lithium market, the consumption of the mineral will continue to be dominated by a greater demand for batteries, with a need in the order of 1,250 thousand tons in 2025, which is equivalent to 89% of all that is being demanded. Sixty-seven percent of the demand is driven by the automotive industry, while the remaining 11% is destined for industrial and chemical use.
For next year, it is estimated that there will be a demand for 1,404 thousand tons, versus the 1,129 thousand required for 2024, while the supply increased from 1,246 thousand to 1,594 thousand tons.
However, the price of lithium carbonate has been falling. After registering a significant increase in 2022, with US$ 70,000/ton, in 2024 it fell to US$ 12,100/ton due to lower sales of electric cars, reduction of inventory, greater supply of the mineral due to the entry of new projects, among other reasons.
A complex scenario
Chile is at a crossroads. A Deutsche Bank analysis in October showed that a world supply of 1.3 million tons of Lithium Carbonate Equivalent (LCE) is expected in 2025, which will grow to 2.1 million tons in 2030, where the country will satisfy 23% of the world demand, but will drop to 17% by the end of the decade due to the entry and greater growth of other players such as Africa, Argentina or the United States.
This shows the complexity that our country has for its supply to grow at the pace of the growth that global demand will supposedly have, and it is not observed that it can reverse these figures in terms of participation in world production, analyzes Víctor Pérez, academic of the Faculty of Engineering and Sciences of the Adolfo Ibáñez University.
Rodrigo Cabrera, senior manager of industries and energy at EY, explains that the projections indicate that Chile will give up its share in the lithium supply ‘because there is no certainty that new projects will be developed during this period to add production to what we already know’.
However, he considers that in any case everything remains to be seen, since given the projected prices ‘many projects are slowing down while waiting for better projections’, which he values as good news for Chile, because time can be gained.
From invitation to action
The executive adds that the private sector has already understood that local rules are different from other countries, and that in any case there will be investments due to Chile’s progress with the National Lithium Strategy, which the Government plans to have implemented by September 2025.
Chile’s first challenge will be to move from invitation to action, from calls for companies to indicate their interest in investing to materializing that investment in the shortest possible time. Implementing the National Lithium Strategy in a good way is fundamental‘, emphasizes Alejandro Montt, director of mining and projects at Albagli Zaliasnik (az), and indicates that the state projects linked to it, ‘should be enabled in the short and medium term, such as the association of Codelco and SQM in the Salar de Atacama, the Salares Alto Andinos project led by Enami, the Codelco project in Maricunga and the new initiatives that can be developed in the 12 prioritized deposits‘.
In terms of R&D&I, says Pérez, the implementation of the Institute of Clean Technologies (ITL) and the National Institute of Lithium and Salt Flats (iLiSa) are key to support, with funding, studies related to productive issues, biodiversity and socio-environmental balance linked to lithium and salt flats. They will play a key role in the industrialization of the resource and in the generation of added value to lithium, in addition to the training of advanced human capital linked to the territory and the communities.
Pérez adds that it is also a priority for the private industry to have a clear, agile and stable framework for public-private collaboration with a focus on environmental permits, special lithium operation contracts and baseline studies of the prioritized salt flats: ‘In this way it will be possible to face the great challenges that the private industry has faced to date and maximize the benefits of this strategic resource for our country’.
